Pub. 7 2017-2018 Issue 4

22 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S Where Is the Value in the Conduit IRA? BY STEPHANIE SWANSON, COPYWRITER, ASCENSUS Y ou rarely hear the term “conduit IRA” anymore. Once a more common part of retirement savings portability, conduit IRAs have become a retirement savings relic. Increased portability between IRAs and employer-sponsored retirement plans hasmostly diminished their purpose—to hold retirement plan assets for future rollovers back to retirement plans. So is there a need to offer a conduit IRA product? As the usefulness of conduit IRAs continues to decline, you may find it more beneficial to focus on growing other parts of your IRA program. Still, some individuals may find the few remaining conduit IRA benefits of value. What Is a Conduit IRA? Sometimes called a “rollover IRA,” a conduit IRAholds only retirement plan rollover assets. These Traditional IRAs were established to temporarily hold retirement plan rollover assets, such as savings in a 401(k) or profit sharing plan. By segregat - ing the assets, the individual can later move the savings back to another retirement plan and retain certain tax benefits. If the individual makes other types of IRA contributions, such as regular IRA contributions, the IRA loses its conduit status. Conduit IRAs became less important when the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) expanded portability. Since 2002, individuals can roll over Traditional IRA assets into eligible retirement plans if allowed by the plan, regardless of whether they are maintained as con- duit IRAs. Because of this, many individuals commingle their retirement assets. But some individuals may wish to retain their retirement plan rollovers in a conduit IRA to help identify and track their savings. Some may keep the assets separate to